The Taliban assault on the outskirts of Kandahar is the latest display of prowess by the militants despite a record number of U.S. and NATO troops in the country.

The push into the Arghandab district -- a lush region filled with grape and pomegranate groves that the Soviet army could never conquer -- comes three days after a Taliban attack on Kandahar's prison that freed 400 insurgent fighters.

Those fighters, NATO conceded Monday, appear to be massing on the doorstep of the Taliban's former power base. The city of Kandahar lies only 10 miles to the southeast.

The sophisticated and successful jailbreak, followed by the movement into Arghandab, is the latest evidence of the Taliban's growing strength. The U.S. and NATO have pleaded for more troops in the last year and now have 65,000 in the country. But the militants are still finding successes the international alliance can't counter.

"Three days ago, inside of a 30-minute operation, the Taliban freed hundreds of prisoners, and NATO, the Canadians, the Americans, didn't do anything," said Mohammad Asif, 30, of Kandahar. "Now more than 500 Taliban are living in Arghandab. They are occupying the region."

Mohammad Farooq, the government leader in Arghandab, said about 500 Taliban fighters moved into his district and took over several villages. He said families were fleeing even as Canadian, U.S. and Afghan forces were moving in.

A large river bisects Arghandab's fertile lands. The east side, closest to Kandahar, is controlled by NATO and Afghan troops, Farooq said. The area to the river's west is now controlled by the Taliban.

"The Taliban told us to leave. They are planting mines everywhere," said Shafiq Khan, who was moving his wife, seven children and brother out of Arghandab in a small truck late Monday. Khan reported that helicopters were patrolling the skies. "The people are scared," he said by cell phone.

Arghandab lies just northwest of Kandahar, and a tribal leader from the region warned that the militants could use the cover from Arghandab's orchards to mount an attack on the city.

"All of Arghandab is made of orchards. The militants can easily hide and easily fight," said Haji Ikramullah Khan. "It's quite close to Kandahar. During the Russian war, the Russians didn't even occupy Arghandab, because when they fought here they suffered big casualties."

Security in Kandahar had been increased noticeably. Police with rockets on their shoulders kept lookout from the roof of police headquarters, and the few remaining aid groups in town added guards.

NATO spokesman Mark Laity said NATO and Afghan military officials were redeploying troops to the region to "meet any potential threats."

"It's fair to say that the jailbreak has put a lot of people (militants) into circulation who weren't there before, and so obviously you're going to respond to that potential threat," he said.

One Taliban fighter who escaped from the Kandahar prison Friday said he plans on rejoining the insurgency.

"This is jihad," Ameer Mohammed, 27, told The Associated Press on Monday. "We will not abandon it because we were jailed."

Friday's attack at Sarposa Prison involved dozens of militants on motorbikes and two suicide bombers. One suicide bomber set off an explosives-laden tanker truck at the prison gate while a second bomber blew up an escape route through a back wall. Rockets fired from inside the prison's courtyard collapsed an upper floor.

Two powerful anti-Taliban leaders from Arghandab have died in the last year, weakening the region's defenses. Mullah Naqib, the district's former leader, died of a heart attack in October. Taliban fighters moved into Arghandab en masse two weeks after his death but left within days after soldiers moved in.

A second leader, police commander Abdul Hakim Jan, died in a massive suicide bombing in Kandahar in February.

Sarah Chayes, who runs a non-governmental organization in Kandahar that makes and sells soap and body oils, said on her Web site that Arghandab "is currently acting as the dike protecting Kandahar from a surge of Taliban presence."

"And Arghandab, as Mullah Naqib proved during the anti-Soviet jihad, is a formidable place for a resistance movement to be based. Once well ensconced there, the Taliban would be nearly impossible to dislodge."

Chayes said by e-mail Monday that Taliban plans for the Arghandab attack and the prison assault were "obviously long in the making."

The Taliban last attempted a large-scale assault in Kandahar province in late 2006, months-long engagement that killed more than 500 of its fighters. That marked the last time the Taliban fought in large formations. It has since increased the use of suicide and roadside bombs, and its fighters move in smaller groups.

The assault came a day after President Hamid Karzai angrily told a news conference that he would send Afghan troops into Pakistan to hunt down Taliban leaders in response to the militants crossing into Afghanistan from Pakistan.

On Monday, hundreds of Afghans demonstrated in eastern Afghanistan in support of Karzai's threat.

Pakistan summoned the Afghan ambassador and said it would "defend its territorial sovereignty" in a spat marking a new low in relations between key partners in the U.S.-led war on terrorism.

President Bush, speaking in London, said the United States can help calm the "testy situation." Bush said the U.S. mission remains to deny safe haven to extremists who want to kill innocent people.

"That's the strategy of Afghanistan. It needs to be the strategy of Pakistan," Bush said.